Ciena reported its return to profitability under generally accepted accounting practices today on both a quarterly and annual basis. And the company owed much of its success to sales of optical equipment—Ciena’s oldest business but one that it struggled to become less reliant on during the telecom downturn.

Ciena reported $160 million in revenue for its fiscal fourth quarter (which ended Oct. 31), up 5% sequentially and up 35% from a year earlier. Revenue for the full fiscal year was up 32% to $564 million. Ciena also reported a net income of $13 million (or $0.14 per share) for the quarter and $0.6 million (or $0.01 per share) for the fiscal year. Ciena reported a return to profitability on an adjusted basis in June, one quarter ahead of schedule.

Now operating from “a position of renewed strength,” the return to real profits allows Ciena to “go on the offensive in 2007,” said Gary Smith, the company’s chief executive officer, predicting fiscal first-quarter revenue to rise sequentially by a low single-digit percentage.

Ciena’s optical networking business shouldered most of the boost in the fourth quarter, contributing $119 million, or 74% of the quarter’s revenue. Revenue from the largest contributor within that segment, long-haul core transport gear, grew less than 4% sequentially to $54 million in the quarter. Revenue from Ciena’s 4200 multiservice transport platform, introduced in 2005, roughly doubled sequentially to nearly $23 million. But revenue from the vendor’s data and broadband access products sank about 60% and 33%, respectively, from the third quarter.

As Ciena works to migrate functionality from one product to another, however, charting the progress of individual products becomes less meaningful, Smith said. “The lines between our products are blurring, making these historical groupings less relevant.”

Thirty-eight percent of Ciena’s fourth-quarter revenue came from two carriers: a North American carrier buying primarily long-haul capacity additions (possibly Verizon Business, which recently announced having built a transatlantic optical mesh network using Ciena’s CoreDirector platform) and an international carrier that has not been a top customer of Ciena’s since early 2004.

Forty percent of Ciena’s revenue this year came from top customers AT&T, Verizon and Sprint.

“We’ve got a fair base of major tier-one telcos now,” Smith said. “In any one quarter, when one is digesting installation, another is ordering.”

“In addition to success-based spending for network upgrades, we’re seeing acceleration in practical network transition strategies to improve business models and increase competitive advantages,” he added.

Though other vendors have recently complained about spending withdrawal as a result of delays in the proposed merger of AT&T and BellSouth, Smith said Ciena, which supplies both carriers, is well-positioned to benefit from carrier consolidation. “So far, so good,” he said.

Meanwhile, Ciena is growing its customer base in the cable, government and research and education markets as well.

Ciena added 63 employees in the quarter, primarily to its research and development facility in India. And it ended the quarter with $1.2 billion in cash and equivalents.